Fradkin v. Ernst
United States District Court for the Northern District of Ohio
571 F. Supp. 829 (1983)
Relevant factsFree
Mohawk Rubber's directors, including Ernst (defendant), approved a stock option plan for senior executives and issued a proxy statement describing it, which shareholders then approved. Fradkin and other shareholders (plaintiffs) sued, alleging the proxy statement violated SEC Rule 14a-9. The directors argued shareholders had to prove they acted with scienter to establish liability.
IssueFree
Whether a shareholder must establish that a corporate issuer acted with scienter in order to hold the issuer liable for a fraudulent or misleading proxy statement under SEC Rule 14a-9.